If your tools are really sharp and you are getting this then ,yes I would suggest it is fire wood.
The punky portion is to bland to look good. I'm not even sure that it would make good firewood. I hope you were wearing good breathing protection for that mold. That stuff is rough on your lungs. You could stabilize this wood for turning, but I just don't think it is worth it.
Brian
Sawdust Formation Engineer
in charge of Blade Dulling
OK - Thanks - I'll toss it. In the mean time I tossed a roughed out walnut bowl and finished turned it and it was much more fun.
It is really too soft for a usable turned piece, but you can use it as practice. Dust mask should be used. With your tools freshly sharpened, try and take a very small light cut with just the nose of the tool and move the tools slowly to try and get a smooth cut. You will need to experiment with the cutting angle to try and get a more skewed slicing cut and very light.
You will not get a glass smooth cut, but in the end you will learn to slow down and have soft hands and ways to get a clean cut for wood that may have a hard to cut soft spot.
You can see that the sap wood is well into decay while the more rot resistant heart wood is still pretty well intact.